2
Extending principles of microfinance to private rental support
The WCC Housing Brokerage model brings together elements from microfinance and Private Rental
Support Programs with flexible brokerage funds matched with support to assist with access to the private
rental market and to help sustain tenancies. This section briefly reviews the emerging evidence base on
both combined elements. There is limited peer reviewed literature on the effectiveness of microfinance
and private rental support programs, with much of the evidence base confined to practice reports.
2.1
Microfinance as a pathway to
financial inclusion
continue to access pay day lenders as they provide
a quick solution to urgent financial needs (Lee
2014).
Microfinance is an alternative source of credit for
low income households to assist with the purchase
of essential household items and with the
transition out of poverty through the funding of
self-enterprise. While various models of
microfinance have evolved to reflect local needs
and conditions, the main distinction of
microfinance from mainstream and fringe finance
is the provision of loans for small sums of money
with very low to zero interest.
Although the evidence base on microfinance is
still emerging, there is some indication of its
effectiveness as a viable alternative to pay day
and other high risk loans.
The broader microfinance literature reviewed
suggest that, for the most part, households are
able to manage their repayments provided the
loan is flexible, well governed, and that they are
based on no to low interest. The positive impact of
microfinance is greatest when it is combined with
other forms of assistance and education that aim
to build financial literacy, provides practical and
emotional support (Mouy 2010; Brackertz, 2012;
Becchettia & Conzoa 2013; Centre Social impact
2014).
Microfinance loans are typically less tha